Versace, the Italian fashion house founded by Gianni Versace 40 years ago, is to be sold to the US handbag and clothing brand Michael Kors for $2bn (£1.5bn).

The sale of the Milan-based brand will turn the late designer’s niece, Allegra Versace Beck, into a near-billionaire as she inherited half of the company after his murder outside his Miami mansion in 1997.

The Versace family still own 80% of the fashion house following the sale of a 20% stake to the US private equity group Blackstone for €210m in 2014. Of the remaining stake, Allegra owns 50%, her mother and Gianni’s sister, Donatella Versace, owns 20% and Gianni’s older brother, Santo, owns 30%.

The family will retain a minority stake and some creative control in the company, according to Reuters, which said three sources confirmed the deal with Kors. Blackstone will sell its entire stake.

Versace, Michael Kors and Blackstone declined to comment on speculation surrounding the sale, which was first reported by the Italian newspaper Corriere della Sera. The paper said 63-year-old Donatella, who is the brand’s vice-president and artistic director, has called an all-staff meeting for Tuesday to announce the deal.

Versace had planned to float the company on the stock market but put the plans on hold owing to unfavourable market conditions. Its chief executive, Jonathan Akeroyd, said earlier this year that he expected the brand to achieve sales of more than €1bn (£895m) in 2018, up from €686m in 2016, the latest available figures.

Michael Kors has bought several fashion labels recently, including the London shoemaker Jimmy Choo for almost £900m.

Kate Swaine, a partner at the law firm Gowling WLG, said: “It is interesting to witness the marriage of such distinct brands in order to create another multinational luxury goods conglomerate. Although Michael Kors already owns Jimmy Choo, the addition of Versace is a major expansion for the group. They are not yet on the scale of LVMH or Kering but clearly have ambitions to expand their reach in the luxury goods sector.”

Neil Saunders, the managing director of the analysis firm GlobalData Retail, said: “That Michael Kors should court Versace is no great surprise. The American company has long desired to transform itself into a house of luxury brands; a process it started with last year’s acquisition of Jimmy Choo. Versace comes with a much bigger price tag – almost double the $1.2bn price that Michael Kors paid for Jimmy Choo. However, it would also put a big-hitting brand with true global status into Michael Kors’ stable.”

However, Saunders added that Michael Kors was buying a brand that “needs work and some repositioning” because it is struggling to increase sales.

Allegra, 32, the daughter of Donatella and the former American model Paul Beck, had grown close to Gianni before his death. “I like to talk to Allegra,” Gianni told Vanity Fair in an article published shortly before his death. “Allegra tells me the truth about Donatella. She’ll say: ‘Gianni, don’t worry, she’s always a little bit exaggerated.’” Allegra, who was only 11 at the time of Gianni’s death, is said to have told him: “You are a magician, uncle.”

Gianni also left Allegra a house in Milan, a villa on Lake Como, a $22m New York townhouse and the 12-bedroom mansion in Miami where he was killed. He left her then six-year-old brother, Daniel, his $68m art collection, including paintings by Picasso, Léger and Basquiat.